|
ANNUAL REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (THE “EXCHANGE
ACT”)
|
|
Pennsylvania
|
23-2486815
|
|
(State
or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S.
Employer Identification No.)
|
|
50
South 16th
Street, Suite 2400, Philadelphia, PA
|
19102
|
|
(Address
of Principal Executive offices)
|
(Zip
Code)
|
Common
Stock $0.01 Par Value
|
10,800,566
|
|
Title
of Class
|
Number
of Shares Outstanding as of March 4,
2008
|
PART
I
|
Page
|
||
Item
1
|
Description
of Business
|
||
Item
1A
|
Risk
Factors
|
||
Item
1B
|
Unresolved
Staff Comments
|
||
Item
2
|
Description
of Properties
|
||
Item
3
|
Legal
Proceedings
|
||
Item
4
|
Submission
of Matters to a Vote of Security Holders
|
||
PART
II
|
|||
Item
5
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
||
Item
6
|
Selected
Financial Data
|
||
Item
7
|
Management’s
Discussion and Analysis of Results of Operations and Financial
Condition
|
||
Item
7A
|
Quantitative
and Qualitative Disclosure about Market Risk (Item 305 of Reg
S-K)
|
||
Item
8
|
Financial
Statements and Supplementary Data
|
||
Item
9
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
||
Item
9A
|
Controls
and Procedures
|
||
Item
9B
|
Other
Information
|
||
PART
III
|
|||
Item
10
|
Directors,
Executive Officers and Corporate Governance
|
||
Item
11
|
Executive
Compensation
|
||
Item
12
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
||
Item
13
|
Certain
Relationships and Related Transactions, and Directors
Independence
|
||
Item
14
|
Principal
Accounting Fees and Services
|
||
PART
IV
|
|||
Item
15
|
Exhibits
and Financial Statement Schedules
|
||
Signatures
|
·
|
statements
of goals, intentions and
expectations;
|
·
|
statements
regarding prospects and business
strategy;
|
·
|
statements
regarding asset quality and market risk;
and
|
·
|
estimates
of future costs, benefits and
results.
|
(a)
|
repealed
the key provisions of the Glass Steagall Act so as to permit commercial
banks to affiliate with investment banks (securities
firms);
|
(b)
|
amended
the BHC Act to permit qualifying bank holding companies to engage in any
type of financial activities that were not permitted for banks themselves;
and
|
(c)
|
permitted
subsidiaries of banks to engage in a broad range of financial activities
that were not permitted for banks
themselves.
|
1.
|
We
must state that we accept the responsibility for maintaining an adequate
internal control structure and procedures for financial
reporting;
|
2.
|
We
must present an assessment, at each year end, of the effectiveness of the
internal control structure and procedures for our financial reporting;
and
|
3.
|
We
must have our auditors audit our internal control over financial reporting
and provide an opinion that we have maintained, in all material respects,
effective internal control over financial reporting as of December 31,
2007. The audit must be made in accordance with standards
issued or adopted by the Public Company Accounting Oversight
Board.
|
Item 1A:
|
Risk
Factors
|
•
|
potential
exposure to unknown or contingent liabilities of banks and businesses we
acquire;
|
•
|
exposure
to potential asset quality issues of the acquired bank or related
business;
|
•
|
difficulty
and expense of integrating the operations and personnel of banks and
businesses we acquire; and
|
•
|
the
possible loss of key employees and customers of the banks and businesses
we acquire.
|
Item 1B:
|
Unresolved
Staff Comments
|
|
None
|
Year
|
Quarter
|
High
|
Low
|
|
2007
|
4th
|
$ 8.94
|
$ 6.77
|
|
3rd
|
9.92
|
7.25
|
||
2nd
|
11.93
|
9.45
|
||
1st
|
12.09
|
11.09
|
||
2006
|
4th
|
$12.37
|
$11.36
|
|
3rd
|
12.53
|
11.36
|
||
2nd
|
12.95
|
11.90
|
||
1st
|
12.29
|
10.55
|
Period Ending
|
||||||
Index
|
12/31/02
|
12/31/03
|
12/31/04
|
12/31/05
|
12/31/06
|
12/31/07
|
Republic
First Bancorp, Inc.
|
100.00
|
187.51
|
258.88
|
322.50
|
349.34
|
206.24
|
NASDAQ
Composite
|
100.00
|
150.01
|
162.89
|
165.13
|
180.85
|
198.60
|
SNL
Bank Index
|
100.00
|
134.90
|
151.17
|
153.23
|
179.24
|
139.28
|
Total
|
Maximum
|
||||||||
Number
of
|
Number
|
||||||||
Shares
|
of
Shares
|
||||||||
Purchased
as
|
that
|
||||||||
Total
|
Part
of
|
May
Yet Be
|
|||||||
Number
of
|
Average
|
Publically
|
Purchased
|
||||||
Shares
|
Price
Paid per
|
Announced
|
Under
the
|
||||||
Period
|
Purchased
|
Share
|
Program
|
Program (a) (b) (c)
|
|||||
June
20 through
|
|||||||||
June
29, 2007
|
44,500
|
$ 9.79
|
44,500
|
455,500
|
|||||
July
3 through
|
|||||||||
July
31, 2007
|
60,800
|
$ 9.51
|
60,800
|
394,700
|
|||||
August
1 through
|
|||||||||
August
22, 2007
|
35,400
|
$ 8.21
|
35,400
|
359,300
|
|||||
(a)
The implementation of the Stock Repurchase Program was announced on June
13, 2007.
|
|||||||||
(b)
The amount of shares to be repurchased will not exceed 5%, or
approximately 500,000 shares.
|
|||||||||
(c)
The repurchase program is in effect from June 14, 2007 through June 30,
2008.
|
As
of or for the Years Ended December 31,
|
||||||||||
(Dollars
in thousands, except per share data)
|
2007
|
2006
|
2005
|
2004
|
2003
|
|||||
INCOME
STATEMENT DATA (1):
|
||||||||||
Total
interest income
|
$ 68,346
|
$ 62,745
|
$ 45,381
|
$ 33,599
|
$ 37,742
|
|||||
Total
interest expense
|
38,307
|
28,679
|
16,223
|
14,748
|
16,196
|
|||||
Net
interest income
|
30,039
|
34,066
|
29,158
|
18,851
|
21,546
|
|||||
Provision
for loan losses
|
1,590
|
1,364
|
1,186
|
(314)
|
5,827
|
|||||
Non-interest
income
|
3,073
|
3,640
|
3,614
|
4,466
|
2,853
|
|||||
Non-interest
expenses
|
21,364
|
21,017
|
18,207
|
15,346
|
14,614
|
|||||
Income
from continuing operations before income taxes
|
10,158
|
15,325
|
13,379
|
8,285
|
3,958
|
|||||
Provision
for income taxes
|
3,273
|
5,207
|
4,486
|
2,694
|
1,267
|
|||||
Income
from continuing operations
|
6,885
|
10,118
|
8,893
|
5,591
|
2,691
|
|||||
Income
from discontinued operations
|
-
|
-
|
-
|
5,060
|
3,440
|
|||||
Income
tax on discontinued operations
|
-
|
-
|
-
|
1,711
|
1,217
|
|||||
Net
income
|
$ 6,885
|
$ 10,118
|
$ 8,893
|
$ 8,940
|
$ 4,914
|
|||||
PER
SHARE DATA (1) (2)
|
||||||||||
Basic
earnings per share
|
||||||||||
Income
from continuing operations
|
$ 0.66
|
$ 0.97
|
$ 0.88
|
$ 0.57
|
$ 0.28
|
|||||
Income
from discontinued operations
|
-
|
-
|
-
|
0.35
|
0.23
|
|||||
Net
income
|
$ 0.66
|
$ 0.97
|
$ 0.88
|
$ 0.92
|
$ 0.51
|
|||||
Diluted
earnings per share
|
||||||||||
Income
from continuing operations
|
$ 0.65
|
$ 0.95
|
$ 0.84
|
$ 0.54
|
$ 0.26
|
|||||
Income
from discontinued operations
|
-
|
-
|
-
|
0.33
|
0.23
|
|||||
Net
income
|
$ 0.65
|
$ 0.95
|
$ 0.84
|
$ 0.87
|
$ 0.49
|
|||||
Book
value per share
|
$ 7.80
|
$ 7.16
|
$ 6.17
|
$ 5.49
|
$ 4.97
|
|||||
BALANCE
SHEET DATA (1)
|
||||||||||
Total
assets (3)
|
$1,016,308
|
$1,008,824
|
$
850,855
|
$
720,412
|
$
654,792
|
|||||
Total
loans, net (4)
|
813,041
|
784,002
|
670,469
|
543,005
|
452,491
|
|||||
Total
investment securities (5)
|
90,299
|
109,176
|
44,161
|
49,160
|
68,094
|
|||||
Total
deposits
|
780,855
|
754,773
|
647,843
|
510,684
|
425,497
|
|||||
FHLB
& overnight advances
|
133,433
|
159,723
|
123,867
|
86,090
|
132,742
|
|||||
Subordinated
debt
|
11,341
|
6,186
|
6,186
|
6,186
|
6,000
|
|||||
Total
shareholders’ equity (3)
|
80,467
|
74,734
|
63,677
|
65,224
|
56,376
|
|||||
PERFORMANCE
RATIOS (1)
|
||||||||||
Return
on average assets on continuing
operations
|
0.71%
|
1.19%
|
1.22%
|
0.87%
|
0.45%
|
|||||
Return
on average shareholders’ equity on continuing operations
|
8.86%
|
14.59%
|
15.22%
|
10.93%
|
5.77%
|
|||||
Net
interest
margin
|
3.26%
|
4.20%
|
4.23%
|
3.15%
|
3.78%
|
|||||
Total
non-interest expenses as a percentage of average assets
|
2.20%
|
2.48%
|
2.49%
|
2.39%
|
2.42%
|
|||||
ASSET
QUALITY RATIOS (1)
|
||||||||||
Allowance
for loan losses as a percentage of loans
(4)
|
1.04%
|
1.02%
|
1.12%
|
1.22%
|
1.59%
|
|||||
Allowance
for loan losses as a percentage of non-performing loans
|
38.19%
|
116.51%
|
222.52%
|
137.70%
|
90.91%
|
|||||
Non-performing
loans as a percentage of total loans (4)
|
2.71%
|
0.87%
|
0.50%
|
0.88%
|
1.75%
|
|||||
Non-performing
assets as a percentage of total assets
|
2.55%
|
0.74%
|
0.42%
|
0.75%
|
1.33%
|
|||||
Net
charge-offs as a percentage of average loans, net
(4)
|
0.14%
|
0.13%
|
0.04%
|
0.07%
|
1.04%
|
|||||
LIQUIDITY
AND CAPITAL RATIOS (1)
|
||||||||||
Average
equity to average assets
|
8.01%
|
8.17%
|
7.99%
|
7.98%
|
7.73%
|
|||||
Leverage
ratio
|
9.44%
|
8.75%
|
8.89%
|
9.53%
|
9.07%
|
|||||
Tier
1 capital to risk-weighted assets
|
10.07%
|
9.46%
|
10.65%
|
11.20%
|
11.70%
|
|||||
Total
capital to risk-weighted assets
|
11.01%
|
10.30%
|
11.81%
|
12.45%
|
12.96%
|
(1)
|
Reflects
the spin off of First Bank of Delaware, presented as discontinued
operations for years prior to 2005.
|
(2)
|
Restated
for 10% stock dividend declared in March
2007
|
(3)
|
Years
prior to 2005 include First Bank of
Delaware
|
(4)
|
Includes
loans held for sale
|
(5)
|
Includes
restricted stock
|
Average
Balance
|
Interest
Income/
Expense
|
Yield/
Rate
(1)
|
Average
Balance
|
Interest
Income/
Expense
|
Yield/
Rate
(1)
|
Average
Balance
|
Interest
Income/
Expense
|
Yield/
Rate
(1)
|
||||||||||
(Dollars
in thousands)
|
For
the Year
Ended
December
31, 2007
|
For
the Year
Ended
December
31, 2006
|
For
the Year
Ended
December
31, 2005
|
|||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||
Federal funds sold and
other
|
||||||||||||||||||
interest-earning
assets
|
$ 13,923
|
$ 686
|
4.93%
|
$ 25,884
|
$ 1,291
|
4.99%
|
$ 36,587
|
$ 1,078
|
2.95%
|
|||||||||
Investment securities and
restricted
stock
|
95,715
|
5,752
|
6.01%
|
57,163
|
3,282
|
5.74%
|
51,285
|
1,972
|
3.85%
|
|||||||||
Loans
receivable
|
820,380
|
62,184
|
7.58%
|
728,754
|
58,254
|
7.99%
|
602,031
|
42,331
|
7.03%
|
|||||||||
Total
interest-earning
assets
|
930,018
|
68,622
|
7.38%
|
811,801
|
62,827
|
7.74%
|
689,903
|
45,381
|
6.58%
|
|||||||||
Other
assets
|
39,889
|
36,985
|
41,239
|
|||||||||||||||
Total
assets
|
$
969,907
|
$
848,786
|
$
731,142
|
|||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||
Demand - non-interest
bearing
|
$ 78,641
|
$ -
|
N/A
|
$ 82,233
|
$ -
|
N/A
|
$ 88,702
|
$ -
|
N/A
|
|||||||||
Demand –
interest-bearing
|
38,850
|
428
|
1.10%
|
53,073
|
565
|
1.06%
|
49,118
|
332
|
0.68%
|
|||||||||
Money market &
savings
|
266,706
|
11,936
|
4.48%
|
240,189
|
9,109
|
3.79%
|
238,786
|
6,026
|
2.52%
|
|||||||||
Time
deposits
|
361,120
|
18,822
|
5.21%
|
304,375
|
14,109
|
4.64%
|
211,972
|
6,789
|
3.20%
|
|||||||||
Total
deposits
|
745,317
|
31,186
|
4.18%
|
679,870
|
23,783
|
3.50%
|
588,578
|
13,147
|
2.23%
|
|||||||||
Total
interest-
|
||||||||||||||||||
bearing
deposits
|
666,676
|
31,186
|
4.68%
|
597,637
|
23,783
|
3.98%
|
499,876
|
13,147
|
2.63%
|
|||||||||
Other
borrowings
|
133,122
|
7,121
|
5.35%
|
88,609
|
4,896
|
5.53%
|
75,875
|
3,076
|
4.05%
|
|||||||||
Total
interest-bearing
|
||||||||||||||||||
liabilities
|
799,798
|
38,307
|
4.79%
|
686,246
|
28,679
|
4.18%
|
575,751
|
16,223
|
2.82%
|
|||||||||
Total
deposits and
|
||||||||||||||||||
other
borrowings
|
878,439
|
38,307
|
4.36%
|
768,479
|
28,679
|
3.73%
|
664,453
|
16,223
|
2.44%
|
|||||||||
Non-interest-bearing
|
||||||||||||||||||
Other
liabilities
|
13,734
|
10,981
|
8,242
|
|||||||||||||||
Shareholders’
equity
|
77,734
|
69,326
|
58,447
|
|||||||||||||||
Total
liabilities and
|
||||||||||||||||||
Shareholders’
equity
|
$
969,907
|
$
848,786
|
$
731,142
|
|||||||||||||||
Net
interest income
(2)
|
$
30,315
|
$
34,148
|
$
29,158
|
|||||||||||||||
Net
interest
spread
|
2.59%
|
3.56%
|
3.76%
|
|||||||||||||||
Net
interest margin
(2)
|
3.26%
|
4.20%
|
4.23%
|
Year
ended December 31,
2007
vs. 2006
|
Year
ended December 31,
2006
vs. 2005
|
|||||||||||||||||||||||
Change
due to
|
Change
due to
|
|||||||||||||||||||||||
(Dollars
in thousands)
|
Average
Volume
|
Average
Rate
|
Total
|
Average
Volume
|
Average
Rate
|
Total
|
||||||||||||||||||
Interest
earned on:
|
||||||||||||||||||||||||
Federal funds sold and
other
|
||||||||||||||||||||||||
interest-earning
assets
|
$ | (589 | ) | $ | (16 | ) | $ | (605 | ) | $ | (534 | ) | $ | 747 | $ | 213 | ||||||||
Securities
|
2,317 | 153 | 2,470 | 337 | 973 | 1,310 | ||||||||||||||||||
Loans
|
6,945 | (3,015 | ) | 3,930 | 10,130 | 5,793 | 15,923 | |||||||||||||||||
Total
interest earning assets
|
$ | 8,673 | $ | (2,878 | ) | $ | 5,795 | $ | 9,933 | $ | 7,513 | $ | 17,446 | |||||||||||
Interest
expense of
|
||||||||||||||||||||||||
Deposits
|
||||||||||||||||||||||||
Interest-bearing demand
deposits
|
$ | 157 | $ | (20 | ) | $ | 137 | $ | (42 | ) | $ | (191 | ) | $ | (233 | ) | ||||||||
Money market and
savings
|
(1,187 | ) | (1,640 | ) | (2,827 | ) | (53 | ) | (3,030 | ) | (3,083 | ) | ||||||||||||
Time deposits
|
(2,958 | ) | (1,755 | ) | (4,713 | ) | (4,283 | ) | (3,037 | ) | (7,320 | ) | ||||||||||||
Total
deposit interest expense
|
(3,988 | ) | (3,415 | ) | (7,403 | ) | (4,378 | ) | (6,258 | ) | (10,636 | ) | ||||||||||||
Other borrowings
|
(2,381 | ) | 156 | (2,225 | ) | (704 | ) | (1,116 | ) | (1,820 | ) | |||||||||||||
Total
interest expense
|
(6,369 | ) | (3,259 | ) | (9,628 | ) | (5,082 | ) | (7,374 | ) | (12,456 | ) | ||||||||||||
Net interest
income
|
$ | 2,304 | $ | (6,137 | ) | $ | (3,833 | ) | $ | 4,851 | $ | 139 | $ | 4,990 |
(Dollars
in thousands)
|
Total
|
Less
than
One Year
|
One
to
Three
Years
|
Three
to
Five
Years
|
After
Five
Years
|
||||
Minimum
annual rentals or noncancellable
operating
leases
|
$ 44,926
|
$ 1,394
|
$ 3,426
|
$ 3,947
|
$
36,159
|
||||
Remaining
contractual maturities of time
deposits
|
422,935
|
406,945
|
15,199
|
736
|
55
|
||||
Subordinated
debt
|
11,341
|
-
|
-
|
-
|
11,341
|
||||
Employment
agreements
|
1,736
|
828
|
908
|
-
|
-
|
||||
Former
CEO SERP
|
143
|
95
|
48
|
-
|
-
|
||||
Director
and Officer retirement plan
obligations
|
1,467
|
117
|
177
|
252
|
921
|
||||
Loan
commitments
|
160,245
|
113,718
|
21,189
|
2,624
|
22,714
|
||||
Standby
letters of credit
|
4,613
|
4,451
|
54
|
108
|
-
|
||||
Total
|
$
647,406
|
$
527,548
|
$
41,001
|
$ 7,667
|
$
71,190
|
0–90
Days
|
91–180
Days
|
181–365
Days
|
1–2
Years
|
2–3
Years
|
3–4
Years
|
4–5
Years
|
More
than
5
Years
|
Financial
Statement
Total
|
Fair
Value
|
|||||||||||||||||||||||||||||||
Interest
Sensitive Assets:
|
||||||||||||||||||||||||||||||||||||||||
Investment
securities and other interest-bearing
|
||||||||||||||||||||||||||||||||||||||||
balances
|
$ | 82,186 | $ | 298 | $ | 11,041 | $ | 9,966 | $ | 8,184 | $ | 6,714 | $ | 5,512 | $ | 28,627 | $ | 152,528 | $ | 152,531 | ||||||||||||||||||||
Average
interest rate
|
4.59 | % | 6.10 | % | 5.97 | % | 5.98 | % | 5.98 | % | 5.98 | % | 5.98 | % | 5.99 | % | ||||||||||||||||||||||||
Loans
receivable
|
384,017 | 20,252 | 107,350 | 83,649 | 73,975 | 57,305 | 48,307 | 46,694 | 821,549 | 822,545 | ||||||||||||||||||||||||||||||
Average
interest rate
|
7.55 | % | 6.81 | % | 6.86 | % | 6.77 | % | 6.77 | % | 6.77 | % | 6.77 | % | 6.69 | % | ||||||||||||||||||||||||
Total
|
466,203 | 20,550 | 118,391 | 93,615 | 82,159 | 64,019 | 53,819 | 75,321 | 974,077 | 975,076 | ||||||||||||||||||||||||||||||
Cumulative
Totals
|
$ | 466,203 | $ | 486,753 | $ | 605,144 | $ | 698,759 | $ | 780,918 | $ | 844,937 | $ | 898,756 | $ | 974,077 | ||||||||||||||||||||||||
Interest
Sensitive Liabilities:
|
||||||||||||||||||||||||||||||||||||||||
Demand
Interest Bearing(1)
|
$ | 17,618 | $ | - | $ | - | $ | 17,617 | $ | - | $ | - | $ | - | $ | - | $ | 35,235 | $ | 35,235 | ||||||||||||||||||||
Average
interest rate
|
1.00 | % | - | - | 1.00 | % | - | - | - | - | ||||||||||||||||||||||||||||||
Savings
Accounts (1)
|
9,146 | - | - | 9,145 | - | - | - | - | 18,291 | 18,291 | ||||||||||||||||||||||||||||||
Average
interest rate
|
4.15 | % | - | - | 4.15 | % | - | - | - | - | ||||||||||||||||||||||||||||||
Money
Market Accounts(1)
|
102,677 | - | - | 102,677 | - | - | - | - | 205,354 | 205,354 | ||||||||||||||||||||||||||||||
Average
interest rate
|
4.50 | % | - | - | 4.50 | % | - | - | - | - | ||||||||||||||||||||||||||||||
Time
Deposits
|
243,363 | 90,651 | 72,932 | 12,768 | 2,430 | 288 | 448 | 55 | 422,935 | 422,704 | ||||||||||||||||||||||||||||||
Average
interest rate
|
4.75 | % | 4.95 | % | 4.83 | % | 4.28 | % | 4.08 | % | 3.97 | % | 4.17 | % | 5.02 | % | ||||||||||||||||||||||||
FHLB
and Short Term
|
||||||||||||||||||||||||||||||||||||||||
Advances
|
133,433 | - | - | - | - | - | - | - | 133,433 | 133,433 | ||||||||||||||||||||||||||||||
Average
interest rate
|
4.50 | % | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
Subordinated
Debt
|
11,341 | - | - | - | - | - | - | - | 11,341 | 11,341 | ||||||||||||||||||||||||||||||
Average
interest rate
|
6.77 | % | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
Total
|
517,578 | 90,651 | 72,932 | 142,207 | 2,430 | 288 | 448 | 55 | 826,589 | 826,358 | ||||||||||||||||||||||||||||||
Cumulative
Totals
|
$ | 517,578 | $ | 608,229 | $ | 681,161 | $ | 823,368 | $ | 825,798 | $ | 826,086 | $ | 826,534 | $ | 826,589 | ||||||||||||||||||||||||
Interest
Rate
|
||||||||||||||||||||||||||||||||||||||||
Sensitivity
GAP
|
$ | (51,375 | ) | $ | (70,101 | ) | $ | 45,459 | $ | (48,592 | ) | $ | 79,729 | $ | 63,731 | $ | 53,371 | $ | 75,266 | |||||||||||||||||||||
Cumulative
GAP
|
$ | (51,375 | ) | $ | (121,476 | ) | $ | (76,017 | ) | $ | (124,609 | ) | $ | (44,880 | ) | $ | 18,851 | $ | 72,222 | $ | 147,488 | |||||||||||||||||||
Interest
Sensitive Assets/
|
||||||||||||||||||||||||||||||||||||||||
Interest
Sensitive
|
||||||||||||||||||||||||||||||||||||||||
Liabilities
|
90.07 | % | 80.03 | % | 88.84 | % | 84.87 | % | 94.57 | % | 102.28 | % | 108.74 | % | 117.84 | % | ||||||||||||||||||||||||
Cumulative
GAP/
|
||||||||||||||||||||||||||||||||||||||||
Total
Earning Assets
|
-5 | % | -12 | % | -8 | % | -13 | % | -5 | % | 2 | % | 7 | % | 15 | % |
(1)
|
Demand,
savings and money market accounts are shown to reprice based upon
management’s estimate of when rates would have to be increased to retain
balances in response to competition. Such estimates are necessarily
arbitrary and wholly judgmental.
|
Change
in
Interest
Rates
|
Net
Portfolio Value
|
NPV
as % of Portfolio
Value
of Assets
|
|||
In
Basis Points
(Rate
Shock)
|
Amount
|
$
Change
|
%
Change
|
NPV
Ratio
|
Change
|
(Dollars
in Thousands)
|
|||||
200bp
|
$119,982
|
$(11,534)
|
(8.77)%
|
12.06%
|
(98)bp
|
100
|
126,123
|
(5,393)
|
(4.10)
|
12.58
|
(46)
|
Static
|
131,516
|
--
|
--
|
13.04
|
--
|
(100)
|
132,168
|
652
|
0.50
|
13.08
|
4
|
(200)
|
131,426
|
(90)
|
(0.07)
|
13.00
|
(4)
|
Change
in Interest Rates in Basis Points (Rate Shock)
|
Net
Interest Income
|
$
Change
|
%
Change
|
(Dollars
in Thousands)
|
|||
200bp
|
$28,862
|
$(1,361)
|
(4.50)%
|
100
|
29,628
|
(595)
|
(1.97)
|
Static
|
30,223
|
--
|
--
|
(100)
|
30,644
|
421
|
1.39
|
(200)
|
31,330
|
1,107
|
3.67
|
Actual
|
For
Capital
Adequacy
Purposes
|
To
be well
capitalized
under
regulatory
capital guidelines
|
|||||||||||
(Dollars
in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||
At
December 31, 2007
|
|||||||||||||
Total
risk based capital
|
|||||||||||||
Republic
|
$99,634
|
11.02%
|
$72,534
|
8.00%
|
$90,667
|
10.00%
|
|||||||
Company
|
99,704
|
11.01%
|
72,638
|
8.00%
|
-
|
-
|
|||||||
Tier
one risk based capital
|
|||||||||||||
Republic
|
91,126
|
10.08%
|
36,267
|
4.00%
|
54,400
|
6.00%
|
|||||||
Company
|
91,196
|
10.07%
|
36,319
|
4.00%
|
-
|
-
|
|||||||
Tier
one leverage capital
|
|||||||||||||
Republic
|
91,126
|
9.45%
|
48,225
|
5.00%
|
48,225
|
5.00%
|
|||||||
Company.
|
91,196
|
9.44%
|
48,294
|
5.00%
|
-
|
-
|
|||||||
At
December 31, 2006
|
|||||||||||||
Total
risk based capital
|
|||||||||||||
Republic
|
$88,256
|
10.28%
|
$61,009
|
8.00%
|
$76,261
|
10.00%
|
|||||||
Company
|
88,510
|
10.30%
|
61,098
|
8.00%
|
-
|
-
|
|||||||
Tier
one risk based capital
|
|||||||||||||
Republic
|
80,198
|
9.34%
|
30,505
|
4.00%
|
45,757
|
6.00%
|
|||||||
Company
|
80,452
|
9.46%
|
30,549
|
4.00%
|
-
|
-
|
|||||||
Tier
one leverage capital
|
|||||||||||||
Republic
|
80,198
|
8.72%
|
45,989
|
5.00%
|
45,989
|
5.00%
|
|||||||
Company
|
80,452
|
8.75%
|
45,990
|
5.00%
|
-
|
-
|
|||||||
Investment
Securities Available for Sale at December 31,
|
||||||||||||
(Dollars
in thousands)
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
U.S.
Government Agencies
|
$ | - | $ | 18,570 | $ | 18,717 | ||||||
Mortgage
backed Securities/CMOs (1)
|
55,579 | 58,642 | 8,691 | |||||||||
Other
securities (2)
|
27,671 | 24,400 | 9,752 | |||||||||
Total
amortized cost of securities
|
$ | 83,250 | $ | 101,612 | $ | 37,160 | ||||||
Total
fair value of investment securities
|
$ | 83,659 | $ | 102,039 | $ | 37,283 | ||||||
Investment
Securities Held to Maturity at December 31,
|
||||||||||||
(Dollars
in thousands)
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
U.S.
Government Agencies
|
$ | 3 | $ | 3 | $ | 3 | ||||||
Mortgage
backed Securities/CMOs (1)
|
15 | 58 | 59 | |||||||||
Other
securities
|
264 | 272 | 354 | |||||||||
Total
amortized cost of investment securities
|
$ | 282 | $ | 333 | $ | 416 | ||||||
Total
fair value of investment securities
|
$ | 285 | $ | 338 | $ | 427 |
Investment
Securities Available for Sale at December 31, 2007
|
||||||||||||||||||||||||||||||||||||||||||||
Within
One Year
|
One
to Five Years
|
Five
to Ten Years
|
Past
10 Years
|
Total
|
||||||||||||||||||||||||||||||||||||||||
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Fair
value
|
Cost
|
Yield
|
||||||||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||
U.S.
Government Agencies
|
$ | - | - | $ | - | - | $ | - | - | $ | - | - | $ | - | $ | - | - | |||||||||||||||||||||||||||
Mortgage
backed securities
|
- | - | - | - | 253 | 6.21 | % | 56,206 | 6.04 | % | 56,459 | 55,579 | 6.04 | % | ||||||||||||||||||||||||||||||
Other securities
|
- | - | 148 | 4.40 | % | 2,104 | 6.02 | % | 24,948 | 5.56 | % | 27,200 | 27,671 | 5.59 | % | |||||||||||||||||||||||||||||
Total
AFS
securities
|
$ | - | - | 148 | 4.40 | % | $ | 2,357 | 6.04 | % | $ | 81,154 | 5.89 | % | $ | 83,659 | $ | 83,250 | 5.89 | % |
Investment
Securities Held to Maturity at December 31, 2007
|
||||||||||||||||||||||||||||||||||||||||
Within
One Year
|
One
to Five Years
|
Five
to Ten Years
|
Past
10 Years
|
Total
|
||||||||||||||||||||||||||||||||||||
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
|||||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||
U.S.
Government Agencies
|
$ | - | - | $ | - | - | $ | 3 | 6.04 | % | $ | - | - | $ | 3 | 6.04 | % | |||||||||||||||||||||||
Mortgage
backed securities
|
- | - | - | - | - | - | 15 | 7.48 | % | 15 | 7.48 | % | ||||||||||||||||||||||||||||
Other
securities
|
80 | 6.10 | % | 75 | 6.45 | % | 34 | 6.01 | % | 75 | 3.50 | % | 264 | 5.45 | % | |||||||||||||||||||||||||
Total
HTM securities
|
$ | 80 | 6.10 | % | $ | 75 | 6.45 | % | $ | 37 | 6.01 | % | $ | 90 | 4.16 | % | $ | 282 | 5.56 | % |
At
December 31,
|
||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||
Commercial:
|
||||||||||||||||||||
Real estate
secured
|
$ | 477,678 | $ | 466,636 | $ | 447,673 | $ | 351,314 | $ | 281,253 | ||||||||||
Construction and land
development
|
228,616 | 218,671 | 141,461 | 107,462 | 86,547 | |||||||||||||||
Non real estate
secured
|
77,347 | 71,816 | 49,515 | 57,361 | 49,850 | |||||||||||||||
Non real estate
unsecured
|
8,451 | 8,598 | 10,620 | 8,917 | 13,398 | |||||||||||||||
Total
commercial
|
792,092 | 765,721 | 649,269 | 525,054 | 431,048 | |||||||||||||||
Residential
real estate
(1)
|
5,960 | 6,517 | 7,057 | 8,219 | 14,875 | |||||||||||||||
Consumer
and
other
|
24,302 | 20,952 | 23,050 | 17,048 | 14,636 | |||||||||||||||
Total
loans
|
822,354 | 793,190 | 679,376 | 550,321 | 460,559 | |||||||||||||||
Deferred
loan
fees
|
805 | 1,130 | 1,290 | 632 | 735 | |||||||||||||||
Total loans, net of deferred
loan fees
|
$ | 821,549 | $ | 792,060 | $ | 678,086 | $ | 549,689 | $ | 459,824 |
At
December 31, 2007
|
||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||
Commercial
and Commercial Real Estate
|
Construction
and Land Development
|
Residential
Real Estate
|
Consumer
and Other
|
Total
|
||||||||||||||||
Fixed
Rate
|
||||||||||||||||||||
1
year or less
|
$ | 77,004 | $ | 9,254 | $ | - | $ | 381 | $ | 86,639 | ||||||||||
1-5
years
|
255,289 | 6,840 | - | 1,143 | 263,272 | |||||||||||||||
After
5 years
|
90,371 | 17,224 | 5,960 | 5,054 | 118,609 | |||||||||||||||
Total fixed
rate
|
422,664 | 33,318 | 5,960 | 6,578 | 468,520 | |||||||||||||||
Adjustable
Rate
|
||||||||||||||||||||
1
year or less
|
63,787 | 152,270 | - | 986 | 217,043 | |||||||||||||||
1-5
years
|
22,900 | 18,983 | - | 187 | 42,070 | |||||||||||||||
After
5 years
|
53,320 | 24,045 | - | 16,551 | 93,916 | |||||||||||||||
Total
adjustable rate
|
140,007 | 195,298 | - | 17,724 | 353,029 | |||||||||||||||
Total
|
$ | 562,671 | $ | 228,616 | $ | 5,960 | $ | 24,302 | $ | 821,549 |
At
December 31,
|
||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||
Loans
accruing, but past due 90 days or more
|
$ | - | $ | - | $ | - | $ | - | $ | 2,928 | ||||||||||
Restructured
loans
|
- | - | - | - | - | |||||||||||||||
Non-accrual
loans
|
||||||||||||||||||||
Commercial
|
14,757 | 6,448 | 2,725 | 3,914 | 3,269 | |||||||||||||||
Construction
|
6,747 | 173 | 492 | 656 | 1,795 | |||||||||||||||
Residential
real estate
|
- | - | - | - | - | |||||||||||||||
Consumer
and other
|
776 | 295 | 206 | 284 | 74 | |||||||||||||||
Total
non-accrual loans
|
22,280 | 6,916 | 3,423 | 4,854 | 5,138 | |||||||||||||||
Total
non-performing loans (1)
|
22,280 | 6,916 | 3,423 | 4,854 | 8,066 | |||||||||||||||
Other
real estate owned
|
3,681 | 572 | 137 | 137 | 207 | |||||||||||||||
Total
non-performing assets (1)
|
$ | 25,961 | $ | 7,488 | $ | 3,560 | $ | 4,991 | $ | 8,273 | ||||||||||
Non-performing
loans as a percentage of total
|
||||||||||||||||||||
loans, net of unearned income
(1) (2)
|
2.71 | % | 0.87 | % | 0.50 | % | 0.88 | % | 1.75 | % | ||||||||||
Non-performing
assets as a percentage of total assets
|
2.55 | % | 0.74 | % | 0.42 | % | 0.75 | % | 1.33 | % |
(1)
|
Non-performing
loans are comprised of (i) loans that are on a non-accrual basis,
(ii) accruing loans that are 90 days or more past due and
(iii) restructured loans. Non-performing assets are composed of
non-performing loans and other real estate
owned.
|
(2)
|
Includes
loans held for sale.
|
For
the Year Ended December 31,
|
||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||
Interest
income that would have been recorded
|
||||||||||||||||||||
had
the loans been in accordance with their
|
||||||||||||||||||||
original
terms
|
$ | 1,447,000 | $ | 479,000 | $ | 165,000 | $ | 391,000 | $ | 253,000 | ||||||||||
Interest
income included in net income
|
$ | - | $ | - | $ | - | $ | 170,000 | $ | - |
For
the Year Ended December 31,
|
||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||
Balance
at beginning of period
|
$ | 8,058 | $ | 7,617 | $ | 6,684 | $ | 7,333 | $ | 6,076 | ||||||||||
Charge-offs:
|
||||||||||||||||||||
Commercial
|
1,503 | 601 | 29 | 1,036 | 365 | |||||||||||||||
Tax
refund loans
|
- | 1,286 | 1,113 | 700 | 1,393 | |||||||||||||||
Consumer
|
3 | - | 21 | 186 | 53 | |||||||||||||||
Short-term
loans
|
- | - | - | - | 4,159 | |||||||||||||||
Total
charge-offs
|
1,506 | 1,887 | 1,163 | 1,922 | 5,970 | |||||||||||||||
Recoveries:
|
||||||||||||||||||||
Commercial
|
81 | 37 | 287 | 1,383 | 1,066 | |||||||||||||||
Tax
refund loans
|
283 | 927 | 617 | 200 | 334 | |||||||||||||||
Consumer
|
2 | - | 6 | 4 | - | |||||||||||||||
Total
recoveries
|
366 | 964 | 910 | 1,587 | 1,400 | |||||||||||||||
Net
charge-offs
|
1,140 | 923 | 253 | 335 | 4,570 | |||||||||||||||
Provision
for loan losses
|
1,590 | 1,364 | 1,186 | (314 | ) | 5,827 | ||||||||||||||
Balance
at end of period
|
$ | 8,508 | $ | 8,058 | $ | 7,617 | $ | 6,684 | $ | 7,333 | ||||||||||
Average
loans outstanding (1)
|
$ | 820,380 | $ | 728,754 | $ | 602,031 | $ | 493,635 | $ | 439,127 | ||||||||||
As
a percent of average loans (1):
|
||||||||||||||||||||
Net
charge-offs (2)
|
0.14 | % | 0.13 | % | 0.04 | % | 0.07 | % | 1.04 | % | ||||||||||
Provision
for loan losses
|
0.19 | % | 0.19 | % | 0.20 | % | (0.06 | )% | 1.33 | % | ||||||||||
Allowance
for loan losses
|
1.04 | % | 1.11 | % | 1.27 | % | 1.35 | % | 1.67 | % | ||||||||||
Allowance
for loan losses to:
|
||||||||||||||||||||
Total
loans, net of unearned income
|
1.04 | % | 1.02 | % | 1.12 | % | 1.22 | % | 1.59 | % | ||||||||||
Total
non-performing loans
|
38.19 | % | 116.51 | % | 222.52 | % | 137.70 | % | 90.91 | % |
At
December 31,
|
||||||||||||||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||||||||||||||||||||||
Allocation
of the allowance for loan losses (1) (2):
|
Amount
|
%
of
Loans
|
Amount
|
%
of
Loans
|
Amount
|
%
of
Loans
|
Amount
|
%
of
Loans
|
Amount
|
%
of
Loans
|
||||||||||||||||||||||||||||||
Commercial
|
$ | 5,303 | 68.5 | % | $ | 5,852 | 69.0 | % | $ | 5,074 | 74.8 | % | $ | 5,016 | 75.9 | % | $ | 5,247 | 74.8 | % | ||||||||||||||||||||
Construction
|
2,739 | 27.8 | % | 1,714 | 27.6 | % | 1,417 | 20.8 | % | 783 | 19.5 | % | 1,058 | 18.8 | % | |||||||||||||||||||||||||
Residential
real estate
|
43 | 0.7 | % | 48 | 0.8 | % | 71 | 1.0 | % | 33 | 1.5 | % | 60 | 3.2 | % | |||||||||||||||||||||||||
Consumer
and other
|
174 | 3.0 | % | 156 | 2.6 | % | 231 | 3.4 | % | 115 | 3.1 | % | 96 | 3.2 | % | |||||||||||||||||||||||||
Unallocated
|
249 | - | 288 | - | 824 | - | 737 | - | 872 | - | ||||||||||||||||||||||||||||||
Total
|
$ | 8,508 | 100 | % | $ | 8,058 | 100 | % | $ | 7,617 | 100 | % | $ | 6,684 | 100 | % | $ | 7,333 | 100 | % |
2007
|
2006
|
|||||||
Balance
at January
1,
|
$ | 572 | $ | 137 | ||||
Additions,
net
|
3,639 | 572 | ||||||
Sales
|
530 | 137 | ||||||
Balance
at December
31,
|
$ | 3,681 | $ | 572 |
At
December 31,
|
||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||
Demand
deposits, non-interest bearing
|
$ | 99,040 | $ | 78,131 | $ | 88,862 | $ | 97,790 | $ | 74,572 | ||||||||||
Demand
deposits, interest bearing
|
35,235 | 47,573 | 69,940 | 54,762 | 70,536 | |||||||||||||||
Money
market & savings deposits
|
223,645 | 260,246 | 223,129 | 170,980 | 98,196 | |||||||||||||||
Time
deposits
|
422,935 | 368,823 | 265,912 | 187,152 | 182,193 | |||||||||||||||
Total
deposits
|
$ | 780,855 | $ | 754,773 | $ | 647,843 | $ | 510,684 | $ | 425,497 |
For
the Years Ended December 31,
|
||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
2007
|
2006
|
2005
|
||||||||||||||||||||||
Average
Balance
|
Rate
|
Average
Balance
|
Rate
|
Average
Balance
|
Rate
|
|||||||||||||||||||
Demand
deposits, non-interest-bearing
|
$ | 78,641 | - | % | $ | 82,233 | - | % | $ | 88,702 | - | % | ||||||||||||
Demand
deposits, interest-bearing
|
38,850 | 1.10 | % | 53,073 | 1.06 | % | 49,118 | 0.68 | % | |||||||||||||||
Money
market & savings deposits
|
266,706 | 4.48 | % | 240,189 | 3.79 | % | 238,786 | 2.52 | % | |||||||||||||||
Time
deposits
|
361,120 | 5.21 | % | 304,375 | 4.64 | % | 211,972 | 3.20 | % | |||||||||||||||
Total
deposits
|
$ | 745,317 | 4.18 | % | $ | 679,870 | 3.50 | % | $ | 588,578 | 2.23 | % |
Certificates
of Deposit
|
||||
(Dollars
in thousands)
|
||||
2007
|
||||
Maturing
in:
|
||||
Three
months or
less
|
$ |
196,422
|
||
Over
three months through six months
|
30,149
|
|||
Over
six months through twelve months
|
7,748
|
|||
Over
twelve
months
|
9,573
|
|||
Total
|
$ |
243,892
|
2008
|
2009
|
2010
|
2011
|
2012
|
Thereafter
|
Total
|
||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||
$ | 406,945 | $ | 12,769 | $ | 2,430 | $ | 288 | $ | 448 | $ | 55 | $ | 422,935 |
(a)
|
(b)
|
(c)
|
||||
Plan
category
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|||
Equity
compensation plans approved by security holders
|
737,841
|
$
6.39
|
(1)
|
|||
Equity
compensation plans not approved by security holders: Incentives to acquire
new employees
|
-
|
-
|
-
|
|||
Total
|
737,841
|
$6.39
|
(1)
|
(1)
|
The
amended plan includes an “evergreen formula” which provides that the
maximum number of shares which may be issued is 1,540,000 shares plus an
annual increase equal to the number of shares required to restore the
maximum number of shares available for grant to 1,540,000
shares.
|
|
(1)
|
Management’s
Report on Internal Control Over Financial
Reporting
|
(2)
|
Reports
of Independent Registered Public Accounting
Firms
|
(3)
|
Consolidated
Balance Sheets as of December 31, 2007 and
2006
|
(4)
|
Consolidated
Statements of Income for the years ended December 31, 2007, 2006 and
2005
|
(5)
|
Consolidated
Statements of Changes in Shareholders’ Equity for the years ended December
31, 2007, 2006 and 2005
|
(6)
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2007, 2006 and
2005
|
(7)
|
Notes
to Consolidated Financial
Statements
|
Exhibit
Number
|
Description
|
Manner of
Filing
|
3.1
|
Amended
and Restated Articles of Incorporation of Republic First Bancorp,
Inc.
|
Incorporated
by reference to Form 10-K Filed March 30, 2005
|
3.2
|
Amended
and Restated By-Laws of Republic First Bancorp, Inc.
|
Incorporated
by reference to Form 10-K Filed March 30, 2005
|
10.1
|
Employment
Contract Between the Company and Harry D. Madonna*
|
Incorporated
by reference to Form 8-K Filed March 2, 2007
|
10.2
|
Amended
and Restated Stock Option Plan and Restricted Stock Plan*
|
|
10.3
|
Deferred
Compensation Plan*
|
Incorporated
by reference to Form 10-Q Filed November 15, 2004
|
10.4
|
Human
Resources and Payroll Services Agreement between Republic First Bank and
BSC Services Corp. dated January 1, 2005
|
Incorporated
by reference to Form 10-K Filed March 30, 2005
|
10.5
|
Operation
and Data Processing Services Agreement between Republic First
Bank and BSC Services Corp. dated January 1, 2005
|
Incorporated
by reference to Form 10-K Filed March 30, 2005
|
10.6
|
Compliance
Services Agreement between Republic First Bank and BSC Services Corp.
dated January 1, 2005
|
Incorporated
by reference to Form 10-K Filed March 30, 2005
|
10.7
|
Financial
Accounting and Reporting Services Agreement between Republic First Bank
and BSC Services Corp. dated January 1, 2005
|
Incorporated
by reference to Form 10-K Filed March 30, 2005
|
10.8
|
Employment
Contract Between Republic and Louis J. DeCesare, Jr.*
|
Incorporated
by reference to Form 8-K Filed March 2, 2007
|
10.9
|
Change
in Control Policy for Certain Executive Officers*
|
Incorporated
by reference to Form 10-K filed March 9, 2007
|
21.1
|
Subsidiaries
of the Company
|
|
23.1
|
Consent
of Beard Miller Company LLP
|
|
31.1
|
Certification
of Chairman and Chief Executive Officer of Republic First Bancorp, Inc.
pursuant to Commission Rule 13a-14(a) and Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
31.2
|
Certification
of Vice President and Chief Financial Officer of Republic First Bancorp,
Inc. pursuant to Commission Rule 13a-14(a) and Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
32.1
|
Certification
under Section 906 of the Sarbanes Oxley Act of Harry D.
Madonna.
|
|
32.2
|
Certification
under Section 906 of the Sarbanes Oxley Act of Paul
Frenkiel.
|
|
REPUBLIC
FIRST BANCORP, INC. [registrant]
|
|||
Date: March
5, 2008
|
By:
|
/s/
Harry D. Madonna
|
|
Harry
D. Madonna
|
|||
Chairman,
President and
|
|||
Chief
Executive Officer
|
|||
Date:
March 5, 2008
|
By:
|
/s/
Paul Frenkiel
|
|
Paul
Frenkiel,
|
|||
Executive
Vice President and
|
|||
Chief
Financial Officer
|
Date: March
5, 2008
|
/s/
Harris Wildstein, Esq.
|
||
Harris
Wildstein, Esq., Director
|
|||
/s/
Neal I. Rodin
|
|||
Neal
I. Rodin, Director
|
|||
/s/
Harry D. Madonna
|
|||
Harry
D. Madonna, Director and Chairman of the Board
|
|||
/s/
Louis J. DeCesare, Jr.
|
|||
Louis
J. DeCesare, Jr., Director
|
|||
/s/
William Batoff
|
|||
William
Batoff, Director
|
|||
/s/
Robert Coleman
|
|||
Robert
Coleman, Director
|
|||
/s/
Barry L. Spevak
|
|||
Barry
L. Spevak, Director
|
|||
/s/
Lyle W. Hall
|
|||
Lyle
W. Hall, Director
|
Page
|
|
Management’s
Report on Internal Control Over Financial Reporting
|
|
Reports
of Independent Registered Public Accounting Firms
|
|
Consolidated
Balance Sheets as of December 31, 2007 and 2006
|
|
Consolidated
Statements of Income
|
|
for
the years ended December 31, 2007, 2006 and 2005
|
|
Consolidated
Statements of Changes in Shareholders’ Equity
|
|
for
the years ended December 31, 2007, 2006 and 2005
|
|
Consolidated
Statements of Cash Flows
|
|
for
the years ended December 31, 2007, 2006 and 2005
|
|
Notes
to Consolidated Financial Statements
|
|
Date: March
5, 2008
|
By:
|
/s/
Harry D. Madonna
|
Harry
D. Madonna
|
||
Chairman,
President and
|
||
Chief
Executive Officer
|
||
Date:
March 5, 2008
|
By:
|
/s/
Paul Frenkiel
|
Paul
Frenkiel,
|
||
Executive
Vice President and
|
||
Chief
Financial Officer
|
Beard
Miller Company LLP
|
|
Malvern,
Pennsylvania
|
|
March
10, 2008
|
2007
|
2006
|
|||||||
ASSETS:
|
||||||||
Cash
and due from
banks
|
$ | 10,996 | $ | 19,454 | ||||
Interest
bearing deposits with
banks
|
320 | 426 | ||||||
Federal
funds
sold
|
61,909 | 63,247 | ||||||
Total cash and cash
equivalents
|
73,225 | 83,127 | ||||||
Investment
securities available for sale, at fair
value
|
83,659 | 102,039 | ||||||
Investment
securities held to maturity, at amortized cost
|
||||||||
(fair value of $285 and
$338 respectively)
|
282 | 333 | ||||||
Restricted
stock, at
cost
|
6,358 | 6,804 | ||||||
Loans
receivable, (net of allowance for loan losses of $8,508 and
$8,058
|
||||||||
respectively)
|
813,041 | 784,002 | ||||||
Premises
and equipment,
net
|
11,288 | 5,648 | ||||||
Other
real estate owned,
net
|
3,681 | 572 | ||||||
Accrued
interest
receivable
|
5,058 | 5,370 | ||||||
Bank
owned life
insurance
|
11,718 | 11,294 | ||||||
Other
assets
|
7,998 | 9,635 | ||||||
Total
Assets
|
$ | 1,016,308 | $ | 1,008,824 | ||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY:
|
||||||||
Liabilities:
|
||||||||
Deposits:
|
||||||||
Demand
—
non-interest-bearing
|
$ | 99,040 | $ | 78,131 | ||||
Demand
—
interest-bearing
|
35,235 | 47,573 | ||||||
Money
market and
savings
|
223,645 | 260,246 | ||||||
Time
less than
$100,000
|
179,043 | 138,566 | ||||||
Time
over
$100,000
|
243,892 | 230,257 | ||||||
Total
Deposits
|
780,855 | 754,773 | ||||||
Short-term
borrowings
|
133,433 | 159,723 | ||||||
Accrued
interest
payable
|
3,719 | 5,224 | ||||||
Other
liabilities
|
6,493 | 8,184 | ||||||
Subordinated
debt
|
11,341 | 6,186 | ||||||
Total
Liabilities
|
935,841 | 934,090 | ||||||
Commitments
and contingencies
|
||||||||
Shareholders’
Equity:
|
||||||||
Preferred
stock, par value $0.01 per share; 10,000,000 shares
authorized;
|
||||||||
no
shares issued as of December 31, 2007 and 2006
|
- | - | ||||||
Common
stock, par value $0.01 per share; 20,000,000 shares
authorized;
|
||||||||
shares issued 10,737,211 as of
December 31, 2007 and
|
||||||||
9,746,312 as of December 31,
2006
|
107 | 97 | ||||||
Additional
paid in
capital
|
75,321 | 63,342 | ||||||
Retained
earnings
|
8,927 | 13,511 | ||||||
Treasury
stock at cost (416,303 shares and 250,555
respectively)
|
(2,993 | ) | (1,688 | ) | ||||
Stock
held by deferred compensation
plan
|
(1,165 | ) | (810 | ) | ||||
Accumulated
other comprehensive
income
|
270 | 282 | ||||||
Total Shareholders’
Equity
|
80,467 | 74,734 | ||||||
Total Liabilities and
Shareholders’
Equity
|
$ | 1,016,308 | $ | 1,008,824 |
2007
|
2006
|
2005
|
||||||||||
Interest
income:
|
||||||||||||
Interest
and fees on loans
|
$ | 62,184 | $ | 58,254 | $ | 42,331 | ||||||
Interest
and dividends on taxable investment securities
|
4,963 | 3,049 | 1,972 | |||||||||
Interest
and dividends on tax- exempt investment securities
|
513 | 151 | - | |||||||||
Interest
on federal funds sold and other interest-earning
assets
|
686 | 1,291 | 1,078 | |||||||||
68,346 | 62,745 | 45,381 | ||||||||||
Interest
expense:
|
||||||||||||
Demand – interest
bearing
|
428 | 565 | 332 | |||||||||
Money market and
savings
|
11,936 | 9,109 | 6,026 | |||||||||
Time less than
$100,000
|
7,200 | 6,031 | 3,181 | |||||||||
Time over
$100,000
|
11,622 | 8,078 | 3,608 | |||||||||
Other
borrowings
|
7,121 | 4,896 | 3,076 | |||||||||
38,307 | 28,679 | 16,223 | ||||||||||
Net
interest income
|
30,039 | 34,066 | 29,158 | |||||||||
Provision
for loan losses
|
1,590 | 1,364 | 1,186 | |||||||||
Net
interest income after provision for loan losses
|
28,449 | 32,702 | 27,972 | |||||||||
Non-interest
income:
|
||||||||||||
Loan advisory and servicing
fees
|
1,177 | 1,234 | 573 | |||||||||
Service fees on deposit
accounts
|
1,187 | 1,479 | 2,000 | |||||||||
Gains on sales and calls of
investment securities
|
- | - | 97 | |||||||||
Gain on sale of other real
estate owned
|
185 | 130 | - | |||||||||
Lawsuit damage
award
|
- | - | 251 | |||||||||
Bank owned life insurance
income
|
424 | 368 | 331 | |||||||||
Other
income
|
100 | 429 | 362 | |||||||||
3,073 | 3,640 | 3,614 | ||||||||||
Non-interest
expenses:
|
||||||||||||
Salaries and employee
benefits
|
10,612 | 11,629 | 9,569 | |||||||||
Occupancy
|
2,420 | 1,887 | 1,566 | |||||||||
Depreciation and
amortization
|
1,360 | 1,008 | 991 | |||||||||
Legal
|
750 | 654 | 673 | |||||||||
Other real
estate
|
23 | 10 | 44 | |||||||||
Advertising
|
503 | 494 | 192 | |||||||||
Data
processing
|
693 | 496 | 504 | |||||||||
Insurance
|
398 | 353 | 296 | |||||||||
Professional
fees
|
542 | 562 | 769 | |||||||||
Taxes,
other
|
820 | 741 | 688 | |||||||||
Other operating
expenses
|
3,243 | 3,183 | 2,915 | |||||||||
21,364 | 21,017 | 18,207 | ||||||||||
Income
before income taxes
|
10,158 | 15,325 | 13,379 | |||||||||
Provision
for income taxes
|
3,273 | 5,207 | 4,486 | |||||||||
Net
Income
|
$ | 6,885 | $ | 10,118 | $ | 8,893 | ||||||
Net
income per share: (1)
|
||||||||||||
Basic
|
$ | 0.66 | $ | 0.97 | $ | 0.88 | ||||||
Diluted
|
$ | 0.65 | $ | 0.95 | $ | 0.84 |
Comprehensive
Income
|
Common
Stock
|
Additional
Paid
in
Capital
|
Retained
Earnings
|
Treasury
Stock
|
Stock
Held by Deferred Compensation Plan
|
Accumulated
Other
Comprehensive
Income
|
Total
Shareholders’
Equity
|
|||||||||||||||||||||||||
Balance
January 1, 2005
|
$ | 74 | $ | 42,494 | $ | 23,867 | $ | (1,541 | ) | $ | - | $ | 330 | $ | 65,224 | |||||||||||||||||
Total
other comprehensive loss, net of reclassification adjustments and taxes of
($119):
|
(227 | ) | - | - | - | (227 | ) | (227 | ) | |||||||||||||||||||||||
Net
income for the year
|
8,893 | - | - | 8,893 | - | - | 8,893 | |||||||||||||||||||||||||
Total
comprehensive income
|
$ | 8,666 | - | - | - | - | - | - | ||||||||||||||||||||||||
Stock
dividend (924,022 shares)
|
10 | 10,968 | (10,978 | ) | ||||||||||||||||||||||||||||
First
Bank of Delaware spin-off
|
- | (5,158 | ) | (6,216 | ) | (22 | ) | (11,396 | ) | |||||||||||||||||||||||
Options
exercised (476,859)
|
4 | 1,271 | - | - | - | 1,275 | ||||||||||||||||||||||||||
Purchase
of treasury shares
(11,961
shares)
|
4 | (147 | ) | (143 | ) | |||||||||||||||||||||||||||
Tax
benefit of stock option
exercises
|
624 | 624 | ||||||||||||||||||||||||||||||
Stock
purchases for deferred
compensation
plan (44,893 shares)
|
(573 | ) | (573 | ) | ||||||||||||||||||||||||||||
Balance
December 31, 2005
|
88 | 50,203 | 15,566 | (1,688 | ) | (573 | ) | 81 | 63,677 | |||||||||||||||||||||||
Total
other comprehensive income, net of taxes of
$103:
|
201 | - | - | - | - | 201 | 201 | |||||||||||||||||||||||||
Net
income for the year
|
10,118 | - | - | 10,118 | - | - | 10,118 | |||||||||||||||||||||||||
Total
comprehensive income
|
$ | 10,319 | - | - | - | - | - | - | ||||||||||||||||||||||||
Stock
based compensation
|
15 | 15 | ||||||||||||||||||||||||||||||
Stock
dividend (885,279 shares)
|
8 | 12,165 | (12,173 | ) | - | - | - | |||||||||||||||||||||||||
Options
exercised (117,248 shares)
|
1 | 699 | - | - | - | 700 | ||||||||||||||||||||||||||
Tax
benefit of stock option
exercises
|
260 | 260 | ||||||||||||||||||||||||||||||
Stock
purchases for deferred
compensation
plan (21,062 shares)
|
(237 | ) | (237 | ) | ||||||||||||||||||||||||||||
Balance
December 31, 2006
|
97 | 63,342 | 13,511 | (1,688 | ) | (810 | ) | 282 | 74,734 | |||||||||||||||||||||||
Total
other comprehensive loss, net of taxesof ($6):
|
(12 | ) | - | - | - | - | (12 | ) | (12 | ) | ||||||||||||||||||||||
Net
income for the year
|
6,885 | - | - | 6,885 | - | - | 6,885 | |||||||||||||||||||||||||
Total
comprehensive income
|
$ | 6,873 | - | - | - | - | - | - | ||||||||||||||||||||||||
Stock
based compensation
|
125 | 125 | ||||||||||||||||||||||||||||||
Stock
dividend (974,441 shares)
|
10 | 11,459 | (11,469 | ) | - | - | - | |||||||||||||||||||||||||
Options
exercised (16,558 shares)
|
- | 47 | - | - | - | 47 | ||||||||||||||||||||||||||
Purchase
of treasury shares (140,700 shares)
|
(1,305 | ) | (1,305 | ) | ||||||||||||||||||||||||||||
Tax
benefit of stock option
exercises
|
348 | 348 | ||||||||||||||||||||||||||||||
Stock
purchases for deferred
compensation
plan (38,000 shares)
|
(355 | ) | (355 | ) | ||||||||||||||||||||||||||||
Balance
December 31, 2007
|
$ | 107 | $ | 75,321 | $ | 8,927 | $ | (2,993 | ) | $ | (1,165 | ) | $ | 270 | $ | 80,467 |
2007
|
2006
|
2005
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
income
|
$ | 6,885 | $ | 10,118 | $ | 8,893 | ||||||
Adjustments to reconcile net
income to net cash
|
||||||||||||
provided by operating
activities:
|
||||||||||||
Provision for loan
losses
|
1,590 | 1,364 | 1,186 | |||||||||
Gain on sale of other real
estate owned
|
(185 | ) | (130 | ) | - | |||||||
Depreciation and
amortization
|
1,360 | 1,008 | 991 | |||||||||
Deferred
income taxes
|
(156 | ) | (222 | ) | (322 | ) | ||||||
Tax benefit of stock option
exercises
|
- | - | 624 | |||||||||
Stock
purchases for deferred compensation plan
|
(355 | ) | (237 | ) | (573 | ) | ||||||
Stock
based compensation
|
125 | 15 | - | |||||||||
Gains
on sales and calls of investment securities
|
- | - | (97 | ) | ||||||||
Amortization of (discounts)
premiums on investment securities
|
(194 | ) | 93 | 189 | ||||||||
Increase in value of bank owned
life insurance
|
(424 | ) | (368 | ) | (331 | ) | ||||||
(Increase) decrease in accrued
interest receivable and other assets
|
2,111 | (193 | ) | 4,388 | ||||||||
Increase (decrease) in accrued
expenses and other liabilities
|
(3,196 | ) | 4,126 | 1,266 | ||||||||
Net cash provided by operating
activities
|
7,561 | 15,574 | 16,214 | |||||||||
Cash
flows from investing activities:
|
||||||||||||
Purchase of investment
securities:
|
||||||||||||
Available for
sale
|
(9,639 | ) | (67,118 | ) | (18,665 | ) | ||||||
Proceeds from maturities and
calls of securities:
|
||||||||||||
Available for
sale
|
28,195 | 2,470 | 20,671 | |||||||||
Held to
maturity
|
51 | 83 | 183 | |||||||||
Principal collected on
investment securities:
|
||||||||||||
Available for
sale
|
- | - | 4,126 | |||||||||
Held to
maturity
|
- | - | 49 | |||||||||
Purchase
of FHLB stock
|
- | (342 | ) | (1,684 | ) | |||||||
Proceeds
from sale of FHLB stock
|
446 | - | - | |||||||||
Net increase in
loans
|
(34,268 | ) | (115,469 | ) | (128,650 | ) | ||||||
Net proceeds from sale of other
real estate owned
|
715 | 267 | - | |||||||||
Decrease in other
interest-earning restricted cash
|
- | - | 2,923 | |||||||||
Premises and equipment
expenditures
|
(7,000 | ) | (3,058 | ) | (964 | ) | ||||||
Net cash used in investing
activities
|
(21,500 | ) | (183,167 | ) | (122,011 | ) | ||||||
Cash
flows from financing activities:
|
||||||||||||
Net proceeds from exercise of
stock options
|
47 | 700 | 1,275 | |||||||||
Purchase
of treasury shares
|
(1,305 | ) | - | (143 | ) | |||||||
Tax benefit of stock option
exercises
|
348 | 260 | - | |||||||||
Net increase (decrease) in
demand, money market and savings deposits
|
(28,030 | ) | 4,019 | 58,399 | ||||||||
Net increase in time
deposits
|
54,112 | 102,911 | 78,760 | |||||||||
Net increase (decrease) in
short term borrowings
|
(26,290 | ) | 35,856 | 62,777 | ||||||||
Call of subordinated
debt
|
- | (6,186 | ) | - | ||||||||
Re-issuance of subordinated
debt
|
- | 6,186 | - | |||||||||
Issuance
of subordinated debt
|
5,155 | - | - | |||||||||
Repayment of FHLB
advances
|
- | - | (25,000 | ) | ||||||||
Net cash provided by financing
activities
|
4,037 | 143,746 | 176,068 | |||||||||
(Decrease)
increase in cash and cash equivalents
|
(9,902 | ) | (23,847 | ) | 70,271 | |||||||
Cash
and cash equivalents, beginning of year
|
83,127 | 106,974 | 36,703 | |||||||||
Cash
and cash equivalents, end of year
|
$ | 73,225 | $ | 83,127 | $ | 106,974 | ||||||
Supplemental
disclosures:
|
||||||||||||
Interest paid
|
$ | 39,812 | $ | 25,268 | $ | 16,535 | ||||||
Income taxes
paid
|
3,425 | 4,700 | 3,885 | |||||||||
Non-monetary transfers from
loans to other real estate owned
|
3,639 | 572 | - |
(In
thousands, except per share data)
|
2007
|
2006
|
2005
|
|||||||||
Net
income (numerator for basic and diluted earnings per
share)
|
$ | 6,885 | $ | 10,118 | $ | 8,893 |
2007
|
2006
|
2005
|
||||||||||||||||||||||
Shares
|
Per
Share
|
Shares
|
Per
Share
|
Shares
|
Per
Share
|
|||||||||||||||||||
Weighted
average shares outstanding for the period
|
||||||||||||||||||||||||
(denominator
for basic earnings per share)
|
10,389,886 | 10,418,266 | 10,116,748 | |||||||||||||||||||||
Earnings
per share — basic
|
$ | 0.66 | $ | 0.97 | $ | 0.88 | ||||||||||||||||||
Effect
of dilutive stock options
|
271,854 | 279,571 | 417,549 | |||||||||||||||||||||
Effect
on basic earnings per share of CSE
|
(0.01 | ) | (0.02 | ) | (0.04 | ) | ||||||||||||||||||
Weighted
average shares outstanding- diluted
|
10,661,740 | 10,697,837 | 10,534,297 | |||||||||||||||||||||
Earnings
per share — diluted
|
$ | 0.65 | $ | 0.95 | $ | 0.84 |
Year
Ended
December
31, 2005
|
||||
Net
Income
|
$ | 8,893 | ||
Stock-based
employee compensation costs determined
|
||||
if
the fair value method had been applied to all awards,
|
||||
net
of
tax
|
(603 | ) | ||
Pro
forma net
income
|
$ | 8,290 | ||
Basic
Earnings per Common Share:
|
||||
As
reported:
|
$ | 0.88 | ||
Pro
forma:
|
$ | 0.82 | ||
Diluted
Earnings per Common Share:
|
||||
As
reported:
|
$ | 0.84 | ||
Pro
forma:
|
$ | 0.79 |
Year
Ended December 31
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Net
income
|
$ | 6,885 | $ | 10,118 | $ | 8,893 | ||||||
Other
comprehensive income/(loss):
|
||||||||||||
Unrealized
gains/(losses) on securities:
|
||||||||||||
Arising
during the period, net of tax/(benefit) of $(6), $103,
|
||||||||||||
and
$(86)
|
(12 | ) | 201 | (163 | ) | |||||||
Less:
reclassification adjustment for gains included in net
income,
|
||||||||||||
net
of tax expense of $ -, $ - and $33
|
- | - | (64 | ) | ||||||||
Other
comprehensive
income/(loss)
|
(12 | ) | 201 | (227 | ) | |||||||
Comprehensive
income
|
$ | 6,873 | $ | 10,319 | $ | 8,666 | ||||||
(Dollars
in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
U.S.
Government
Agencies
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Mortgage
Backed
Securities
|
55,579 | 883 | (3 | ) | 56,459 | |||||||||||
Other Securities
|
27,671 | 36 | (507 | ) | 27,200 | |||||||||||
Total
|
$ | 83,250 | $ | 919 | $ | (510 | ) | $ | 83,659 | |||||||
Investment securities held to
maturity as of December 31, 2007 are as follows:
|
||||||||||||||||
(Dollars
in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
U.S.
Government
Agencies
|
$ | 3 | $ | - | $ | - | $ | 3 | ||||||||
Mortgage
Backed
Securities
|
15 | 1 | - | 16 | ||||||||||||
Other
Securities
|
264 | 2 | - | 266 | ||||||||||||
Total
|
$ | 282 | $ | 3 | $ | - | $ | 285 | ||||||||
Investment securities available
for sale as of December 31, 2006 are as follows:
|
||||||||||||||||
(Dollars
in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
U.S.
Government
Agencies
|
$ | 18,570 | $ | - | $ | (82 | ) | $ | 18,488 | |||||||
Mortgage
Backed
Securities
|
58,642 | 431 | (2 | ) | 59,071 | |||||||||||
Other
Securities
|
24,400 | 156 | (76 | ) | 24,480 | |||||||||||
Total
|
$ | 101,612 | $ | 587 | $ | (160 | ) | $ | 102,039 | |||||||
Investment securities held to
maturity as of December 31, 2006 are as follows:
|
||||||||||||||||
(Dollars
in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
U.S.
Government
Agencies
|
$ | 3 | $ | - | $ | - | $ | 3 | ||||||||
Mortgage
Backed
Securities
|
58 | 2 | - | 60 | ||||||||||||
Other
Securities
|
272 | 3 | - | 275 | ||||||||||||
Total
|
$ | 333 | $ | 5 | $ | - | $ | 338 |
Available
for Sale
|
Held
to Maturity
|
|||||||||||||||
(Dollars in
thousands)
|
Amortized
Cost
|
Estimated
Fair
Value
|
Amortized
Cost
|
Estimated
Fair
Value
|
||||||||||||
Due
in 1 year or
less
|
$ | - | $ | - | $ | 80 | $ | 80 | ||||||||
After
1 year to 5
years
|
150 | 148 | 75 | 75 | ||||||||||||
After
5 years to 10
years
|
2,372 | 2,357 | 37 | 38 | ||||||||||||
After
10
years
|
80,728 | 81,154 | 50 | 52 | ||||||||||||
No
stated
maturity
|
– | – | 40 | 40 | ||||||||||||
Total
|
$ | 83,250 | $ | 83,659 | $ | 282 | $ | 285 |
(Dollars
in thousands)
|
Less
than 12 months
|
12
Months or more
|
Total
|
|||||||||||||||||||||
Description
of Securities
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
US
Government Agencies
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Mortgage
Backed Securities
|
- | - | 137 | 3 | 137 | 3 | ||||||||||||||||||
Other
Securities
|
- | - | 20,452 | 507 | 20,452 | 507 | ||||||||||||||||||
Total
Temporarily Impaired Securities
|
$ | - | $ | - | $ | 20,589 | $ | 510 | $ | 20,589 | $ | 510 |
(Dollars
in thousands)
|
Less
than 12 months
|
12
Months or more
|
Total
|
|||||||||||||||||||||
Description
of Securities
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
US
Government Agencies
|
$ | 18,488 | $ | 82 | $ | - | $ | - | $ | 18,488 | $ | 82 | ||||||||||||
Mortgage
Backed Securities
|
- | - | 154 | 2 | 154 | 2 | ||||||||||||||||||
Other
Securities
|
- | - | 9,370 | 76 | 9,370 | 76 | ||||||||||||||||||
Total
Temporarily Impaired Securities
|
$ | 18,488 | $ | 82 | $ | 9,524 | $ | 78 | $ | 28,012 | $ | 160 |
(Dollars
in thousands)
|
2007
|
2006
|
||||||
Commercial
|
||||||||
Real
estate
secured
|
$ | 477,678 | $ | 466,636 | ||||
Construction
and land
development
|
228,616 | 218,671 | ||||||
Non
real estate
secured
|
77,347 | 71,816 | ||||||
Non
real estate
unsecured
|
8,451 | 8,598 | ||||||
Total
commercial
|
792,092 | 765,721 | ||||||
Residential
real estate
(1)
|
5,960 | 6,517 | ||||||
Consumer
and
other
|
24,302 | 20,952 | ||||||
Loans
receivable
|
822,354 | 793,190 | ||||||
Less
deferred loan
fees
|
(805 | ) | (1,130 | ) | ||||
Less
allowance for loan
losses
|
(8,508 | ) | (8,058 | ) | ||||
Total
loans receivable,
net
|
$ | 813,041 | $ | 784,002 | ||||
(Dollars
in thousands)
|
2007
|
2006
|
||||||
Balance
at beginning of
year
|
$ | 18,033 | $ | 25,054 | ||||
Additions
|
4,807 | 2,969 | ||||||
Repayments
|
(8,966 | ) | (9,990 | ) | ||||
Balance
at end of
year
|
$ | 13,874 | $ | 18,033 |
(Dollars
in thousands)
|
2007
|
2006
|
2005
|
|||||||||
Balance
at beginning of
year
|
$ | 8,058 | $ | 7,617 | $ | 6,684 | ||||||
Charge-offs
|
(1,506 | ) | (1,887 | ) | (1,163 | ) | ||||||
Recoveries
|
366 | 964 | 910 | |||||||||
Provision
for loan
losses
|
1,590 | 1,364 | 1,186 | |||||||||
Balance
at end of
year
|
$ | 8,508 | $ | 8,058 | $ | 7,617 |
(Dollars
in thousands)
|
Useful lives
|
2007
|
2006
|
||||||
Land
|
Indefinite
|
$ | 200 | $ | 200 | ||||
Furniture
and
equipment
|
3
to 13 years
|
11,247 | 8,814 | ||||||
Bank
building
|
40
years
|
845 | 809 | ||||||
Leasehold
improvements
|
1
to 30 years
|
8,760 | 4,229 | ||||||
21,052 | 14,052 | ||||||||
Less
accumulated
depreciation
|
(9,764 | ) | (8,404 | ) | |||||
Net
premises and
equipment
|
$ | 11,288 | $ | 5,648 |
(Dollars
in thousands)
|
2008
|
2009
|
2010
|
2011
|
2012
|
Thereafter
|
Total
|
|||||||||||||||||||||
Time
Certificates of Deposit
|
$ | 406,945 | $ | 12,769 | $ | 2,430 | $ | 288 | $ | 448 | $ | 55 | $ | 422,935 |
9.
|
Income
Taxes:
|
(Dollars
in thousands)
|
2007
|
2006
|
2005
|
|||||||||
Current
provision
|
||||||||||||
Federal:
|
||||||||||||
Current
|
$ | 3,429 | $ | 5,429 | $ | 4,808 | ||||||
Deferred
|
(156 | ) | (222 | ) | (322 | ) | ||||||
Total
provision for income
taxes
|
$ | 3,273 | $ | 5,207 | $ | 4,486 |
(Dollars
in thousands)
|
2007
|
2006
|
2005
|
|||||||||
Tax
provision computed at statutory
rate
|
$ | 3,556 | $ | 5,364 | $ | 4,549 | ||||||
Effect
of 35% rate
bracket
|
(75 | ) | (75 | ) | - | |||||||
Other
|
(208 | ) | (82 | ) | (63 | ) | ||||||
Total provision for income
taxes
|
$ | 3,273 | $ | 5,207 | $ | 4,486 |
2007
|
2006
|
|||||||
Allowance
for loan
losses
|
$ | 2,866 | $ | 2,713 | ||||
Deferred
compensation
|
664 | 674 | ||||||
Unrealized
gain on securities available for
sale
|
(139 | ) | (145 | ) | ||||
Deferred
loan
costs
|
(543 | ) | (535 | ) | ||||
Other
|
(9 | ) | (30 | ) | ||||
Net
deferred tax
asset
|
$ | 2,839 | $ | 2,677 |
(Dollars
in thousands)
|
||||
Year Ended
|
Amount
|
|||
2008
|
$ | 1,394 | ||
2009
|
1,538 | |||
2010
|
1,888 | |||
2011
|
1,947 | |||
2012
|
2,000 | |||
Thereafter
|
36,159 | |||
Total
|
$ | 44,926 |
Actual
|
For
Capital
Adequacy
Purposes
|
To
be well
capitalized
under
regulatory
capital guidelines
|
||||||||||
(Dollars
in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||
At
December 31, 2007
|
||||||||||||
Total
risk based capital
|
||||||||||||
Republic
|
$99,634
|
11.02%
|
$72,534
|
8.00%
|
$90,667
|
10.00%
|
||||||
Company.
|
99,704
|
11.01%
|
72,638
|
8.00%
|
-
|
-
|
||||||
Tier
one risk based capital
|
||||||||||||
Republic
|
91,126
|
10.08%
|
36,267
|
4.00%
|
54,400
|
6.00%
|
||||||
Company.
|
91,196
|
10.07%
|
36,319
|
4.00%
|
-
|
-
|
||||||
Tier
one leverage capital
|
||||||||||||
Republic
|
91,126
|
9.45%
|
48,225
|
5.00%
|
48,225
|
5.00%
|
||||||
Company.
|
91,196
|
9.44%
|
48,294
|
5.00%
|
-
|
-
|
||||||
At
December 31, 2006
|
||||||||||||
Total
risk based capital
|
||||||||||||
Republic
|
$88,256
|
10.28%
|
$61,009
|
8.00%
|
$76,261
|
10.00%
|
||||||
Company.
|
88,510
|
10.30%
|
61,098
|
8.00%
|
-
|
-
|
||||||
Tier
one risk based capital
|
||||||||||||
Republic
|
80,198
|
9.34%
|
30,505
|
4.00%
|
45,757
|
6.00%
|
||||||
Company.
|
80,452
|
9.46%
|
30,549
|
4.00%
|
-
|
-
|
||||||
Tier
one leverage capital
|
||||||||||||
Republic
|
80,198
|
8.72%
|
45,989
|
5.00%
|
45,989
|
5.00%
|
||||||
Company.
|
80,452
|
8.75%
|
45,990
|
5.00%
|
-
|
-
|
13.
|
Benefit
Plans:
|
December
31, 2007
|
December
31, 2006
|
|||||||||||||||
(Dollars
in Thousands)
|
Carrying
Amount
|
Fair
Value
|
Carrying
Amount
|
Fair
Value
|
||||||||||||
Balance
Sheet Data:
|
||||||||||||||||
Financial
Assets:
|
||||||||||||||||
Cash and cash
equivalents
|
$ | 73,225 | $ | 73,225 | $ | 83,127 | $ | 83,127 | ||||||||
Investment securities available
for sale
|
83,659 | 83,659 | 102,039 | 102,039 | ||||||||||||
Investment securities held to
maturity
|
282 | 285 | 333 | 338 | ||||||||||||
Restricted
stock
|
6,358 | 6,358 | 6,804 | 6,804 | ||||||||||||
Loans receivable,
net
|
813,041 | 814,037 | 784,002 | 777,503 | ||||||||||||
Bank owned life
insurance
|
11,718 | 11,718 | 11,294 | 11,294 | ||||||||||||
Accrued interest
receivable
|
5,058 | 5,058 | 5,370 | 5,370 | ||||||||||||
Financial
Liabilities:
|
||||||||||||||||
Deposits:
|
||||||||||||||||
Demand, savings and money
market
|
$ | 357,920 | $ | 357,920 | $ | 385,950 | $ | 385,950 | ||||||||
Time
|
422,935 | 422,704 | 368,823 | 367,200 | ||||||||||||
Subordinated
debt
|
11,341 | 11,341 | 6,186 | 6,186 | ||||||||||||
Short-term
borrowings
|
133,433 | 133,433 | 159,723 | 159,723 | ||||||||||||
Accrued interest
payable
|
3,719 | 3,719 | 5,224 | 5,224 | ||||||||||||
December
31, 2007
|
December
31, 2006
|
|||||||||||||||
(Dollars
in Thousands)
|
Carrying
Amount
|
Fair
Value
|
Carrying
Amount
|
Fair
Value
|
||||||||||||
Off
Balance Sheet financial instruments:
|
||||||||||||||||
Commitments
to extend credit
|
- | - | - | - | ||||||||||||
Standby
letters-of-credit
|
- | - | - | - |
For
the Years Ended December 31,
|
||||||||||||||||||||||||
2007
|
2006
|
2005
|
||||||||||||||||||||||
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
|||||||||||||||||||
Outstanding,
beginning of year
|
661,449 | $ | 5.55 | 780,309 | $ | 5.43 | 1,120,477 | $ | 4.25 | |||||||||||||||
Granted
|
99,000 | 11.77 | 12,100 | 12.14 | 190,961 | 10.14 | ||||||||||||||||||
Exercised
|
(16,558 | ) | 2.81 | (128,973 | ) | 5.44 | (524,545 | ) | 2.43 | |||||||||||||||
Forfeited
|
(6,050 | ) | 12.14 | (1,987 | ) | 6.74 | (6,584 | ) | 6.43 | |||||||||||||||
Outstanding,
end of year
|
737,841 | 6.39 | 661,449 | 5.55 | 780,309 | 5.43 | ||||||||||||||||||
Options
exercisable at year-end
|
632,791 | 5.49 | 649,349 | 5.43 | 780,309 | 5.43 | ||||||||||||||||||
Weighted
average fair value of options granted during the year
|
$ | 4.61 | $ | 5.10 | $ | 4.08 |
For
the Years Ended December 31,
|
||||||||
2007
|
2006
|
|||||||
Number
of Options exercised
|
16,558 | 128,973 | ||||||
Cash
received
|
$ | 46,463 | $ | 700,326 | ||||
Intrinsic
value
|
117,766 | 733,022 | ||||||
Tax
benefit
|
41,218 | 259,550 | ||||||
Options
outstanding
|
Options
exercisable
|
||||||||
Range
of exercise Prices
|
Number
outstanding at December
31,
2007
|
Weighted
Average
remaining
contractual
life
(years)
|
Weighted
Average
exercise
price
|
Shares
|
Weighted
Average
Exercise
Price
|
||||
$1.81
|
106,586
|
3.0
|
$1.81
|
106,586
|
$1.81
|
||||
$2.72
to $3.55
|
170,687
|
4.2
|
2.94
|
170,687
|
2.94
|
||||
$3.76
to $4.62
|
27,275
|
3.8
|
4.00
|
27,275
|
4.00
|
||||
$6.03
to $6.74
|
168,451
|
6.1
|
6.22
|
168,451
|
6.22
|
||||
$9.94
to $12.14
|
264,842
|
8.0
|
10.81
|
159,792
|
10.16
|
||||
737,841
|
$6.39
|
632,791
|
$5.49
|
For
the Year Ended December 31, 2007
|
||||||||
Number
of Shares
|
Weighted
average grant date fair value
|
|||||||
Nonvested
at beginning of year
|
12,100 | $ | 5.10 | |||||
Granted
|
99,000 | 4.61 | ||||||
Forfeited
|
(6,050 | ) | (5.10 | ) | ||||
Nonvested
at end of year
|
105,050 | $ | 4.64 |
2007
|
2006
|
|||||||
ASSETS:
|
||||||||
Cash
|
$ | 296 | $ | 113 | ||||
Corporation-obligated
mandatorily redeemable
capital
securities of subsidiary trust holding junior
obligations
of the
corporation
|
341 | 186 | ||||||
Investment in
subsidiaries
|
91,397 | 80,480 | ||||||
Other
assets
|
962 | 920 | ||||||
Total
Assets
|
$ | 92,996 | $ | 81,699 | ||||
LIABILITIES AND SHAREHOLDERS’
EQUITY:
|
||||||||
Liabilities:
|
||||||||
Accrued
expenses
|
$ | 1,188 | $ | 779 | ||||
Corporation-obligated
mandatorily redeemable
|
||||||||
securities of
subsidiary trust holding solely junior
|
||||||||
subordinated
debentures of the
corporation
|
11,341 | 6,186 | ||||||
Total
Liabilities
|
12,529 | 6,965 | ||||||
Shareholders’
Equity:
|
||||||||
Preferred
stock
|
- | - | ||||||
Common
stock
|
107 | 97 | ||||||
Additional paid in
capital
|
75,321 | 63,342 | ||||||
Retained
earnings
|
8,927 | 13,511 | ||||||
Treasury stock at
cost
|
(2,993 | ) | (1,688 | ) | ||||
Stock
held by deferred compensation
plan
|
(1,165 | ) | (810 | ) | ||||
Accumulated other comprehensive
income
|
270 | 282 | ||||||
Total Shareholders’
Equity
|
80,467 | 74,734 | ||||||
Total Liabilities and
Shareholders’
Equity
|
$ | 92,996 | $ | 81,699 |
2007
|
2006
|
2005
|
||||||||||
Interest
income
|
$ | 19 | $ | 16 | $ | 13 | ||||||
Dividend
income from
subsidiaries
|
2,006 | 539 | 444 | |||||||||
Total
income
|
2,025 | 555 | 457 | |||||||||
Trust
preferred interest
expense
|
631 | 525 | 444 | |||||||||
Expenses
|
89 | 30 | 8 | |||||||||
Total
expenses
|
720 | 555 | 452 | |||||||||
Net
income before
taxes
|
1,305 | - | 5 | |||||||||
Federal
income
tax
|
- | - | 2 | |||||||||
Income
before undistributed income of
subsidiaries
|
1,305 | - | 3 | |||||||||
Total
equity in undistributed income of
subsidiaries
|
5,580 | 10,118 | 8,890 | |||||||||
Net
income
|
$ | 6,885 | $ | 10,118 | $ | 8,893 | ||||||
Shareholders’
equity, beginning of
year
|
$ | 74,734 | $ | 63,677 | $ | 65,224 | ||||||
First
Bank of Delaware
spin-off
|
- | - | (11,396 | ) | ||||||||
Stock
based
compensation
|
125 | 15 | - | |||||||||
Exercise
of stock
options
|
47 | 700 | 1,275 | |||||||||
Purchase
of treasury
shares
|
(1,305 | ) | - | (143 | ) | |||||||
Tax
benefit of stock options
exercises
|
348 | 260 | 624 | |||||||||
Stock
purchase for deferred compensation
plan
|
(355 | ) | (237 | ) | (573 | ) | ||||||
Net
income
|
6,885 | 10,118 | 8,893 | |||||||||
Change
in unrealized gain (loss) on securities available for sale
|
(12 | ) | 201 | (227 | ) | |||||||
Shareholders’
equity, end of
year
|
$ | 80,467 | $ | 74,734 | $ | 63,677 |
2007
|
2006
|
2005
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
income
|
$ | 6,885 | $ | 10,118 | $ | 8,893 | ||||||
Adjustments to reconcile net
income to net cash
|
||||||||||||
provided by (used in) operating
activities:
|
||||||||||||
Tax
benefit of stock option exercises
|
- | - | 624 | |||||||||
Stock
purchases for deferred compensation plan
|
(355 | ) | (237 | ) | (573 | ) | ||||||
Stock
based compensation
|
125 | 15 | - | |||||||||
Increase in other
assets
|
(391 | ) | (74 | ) | (757 | ) | ||||||
(Decrease) increase in other
liabilities
|
409 | (89 | ) | 847 | ||||||||
Equity in undistributed income
subsidiaries
|
(5,580 | ) | (10,118 | ) | (8,890 | ) | ||||||
Net cash provided by (used in)
operating activities
|
1,093 | (385 | ) | 144 | ||||||||
Cash
flows from investing activities:
|
||||||||||||
Investment in
subsidiary
|
(5,000 | ) | (900 | ) | (1,800 | ) | ||||||
Purchase
of corporation- obligated
|
||||||||||||
mandatorily
redeemable capital
|
||||||||||||
securities
of subsidiary trust holding
|
||||||||||||
junior
obligations of the corporation
|
(155 | ) | - | - | ||||||||
Net cash used in investing
activities
|
(5,155 | ) | (900 | ) | (1,800 | ) | ||||||
Cash
from Financing Activities:
|
||||||||||||
Exercise of stock
options
|
47 | 700 | 1,275 | |||||||||
Issuance
of corporation- obligated
|
||||||||||||
mandatorily
redeemable securities
|
||||||||||||
of
subsidiary trust holding solely
|
||||||||||||
junior
subordinated debentures
|
||||||||||||
of
the corporation
|
5,155 | - | - | |||||||||
Purchase
of treasury shares
|
(1,305 | ) | - | (143 | ) | |||||||
Tax
benefit of stock option exercises
|
348 | 260 | - | |||||||||
Net cash provided by financing
activities
|
4,245 | 960 | 1,132 | |||||||||
(Decrease)
increase in cash
|
183 | (325 | ) | (524 | ) | |||||||
Cash,
beginning of period
|
113 | 438 | 962 | |||||||||
Cash,
end of period
|
$ | 296 | $ | 113 | $ | 438 |
For
the Quarter Ended, 2007
|
||||||||||||||||
(Dollars
in thousands, except per share data)
|
Fourth
|
Third
|
Second
|
First
|
||||||||||||
Income
Statement Data:
|
||||||||||||||||
Total
interest
income
|
$ | 16,405 | $ | 17,677 | $ | 17,187 | $ | 17,077 | ||||||||
Total
interest
expense
|
9,245 | 9,873 | 9,677 | 9,512 | ||||||||||||
Net
interest
income
|
7,160 | 7,804 | 7,510 | 7,565 | ||||||||||||
Provision
for loan
losses
|
165 | 1,282 | 63 | 80 | ||||||||||||
Non-interest
income
|
918 | 760 | 755 | 640 | ||||||||||||
Non-interest
expense
|
5,598 | 5,488 | 5,283 | 4,995 | ||||||||||||
Provision
for income
taxes
|
738 | 558 | 951 | 1,026 | ||||||||||||
Net
income
|
$ | 1,577 | $ | 1,236 | $ | 1,968 | $ | 2,104 | ||||||||
Per
Share Data:
|
||||||||||||||||
Basic:
|
||||||||||||||||
Net
income
|
$ | 0.15 | $ | 0.12 | $ | 0.19 | $ | 0.20 | ||||||||
Diluted:
|
||||||||||||||||
Net
income
|
$ | 0.15 | $ | 0.12 | $ | 0.18 | $ | 0.20 |
For
the Quarter Ended, 2006
|
||||||||||||||||
(Dollars
in thousands, except per share data)
|
Fourth
|
Third
|
Second
|
First
|
||||||||||||
Income
Statement Data:
|
||||||||||||||||
Total
interest
income
|
$ | 17,081 | $ | 16,031 | $ | 14,570 | $ | 15,063 | ||||||||
Total
interest
expense
|
8,837 | 7,704 | 6,384 | 5,754 | ||||||||||||
Net
interest
income
|
8,244 | 8,327 | 8,186 | 9,309 | ||||||||||||
Provision
(recovery) for loan
losses
|
(10 | ) | - | 61 | 1,313 | |||||||||||
Non-interest
income
|
807 | 874 | 844 | 1,115 | ||||||||||||
Non-interest
expense
|
5,351 | 5,503 | 5,122 | 5,041 | ||||||||||||
Provision
for income
taxes
|
1,225 | 1,263 | 1,320 | 1,399 | ||||||||||||
Net
income
|
$ | 2,485 | $ | 2,435 | $ | 2,527 | $ | 2,671 | ||||||||
Per
Share Data:
|
||||||||||||||||
Basic:
|
||||||||||||||||
Net
income
|
$ | 0.24 | $ | 0.23 | $ | 0.24 | $ | 0.26 | ||||||||
Diluted:
|
||||||||||||||||
Net
income
|
$ | 0.23 | $ | 0.23 | $ | 0.24 | $ | 0.25 | ||||||||